Changing the Network Infrastructure– Threats and Possibilities Alex Alben Nobember 6, 2003
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Is the Old Distribution Model Broken?
• Moving toward 1 billion Internet enabled users around the world– with at least 30% enabled to access audio-visual media.
• Digital Media distribution across borders breaks the territorial model that has prevailed for over 100 years.
• Consumer identity is “territorial” and emphasizes different legal regimes: U.S. vs. EU vs. China
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Have the Pirates Won?
Industry estimates of losses due to Conventional Means of Piracy:
• Film-- $3 Billion annual (MPAA) from $40 Billion revenue
• Music-- $4.2 Billion annual (RIAA/IFPE) from $32 Billion global revenue
• Software-- $13-15 Billion annual (BSA/SIAA)
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Today’s Legitimate Marketplace:
Category Books Music
Video Streaming Services
Ease of Use
yes no no yes
Privacy Trusted Sellers
maybe maybe maybe
Price Point
Perceived Value
no maybe maybe
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Goals of the DMCA
• Make the Internet safe for digital distribution of valuable IP (music, movies, software programs).
• Harmonize American law with Berne Convention.
• Preserve the “copyright balance” in a new medium.
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DMCA in Practice– The Good
• The Safe Harbor for ISP’s– Legacy of the Netcom case– “Notice and
Take Down”– Has worked well in the ISP context
• Proper enforcement of the DMCA– RealNetworks v. Streambox
• RIAA vs. Verizon– User privacy vs. DMCA subpoena power
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DMCA in Practice– The Bad
• Free Speech and the DMCA:– The DVD-CSS distribution cases– How do you stop redistribution of a tool
that does bad things without also controlling linking?
• The DeCSS Hack– Prosecution in Norwegian court– Economic harm?– Pointed out interoperability issues
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DMCA in Practice– The Ugly
• Internet Radio Royalties:– Process took three years to reach a result– Rates for Internet radio 7-10 times higher
than performance rates for terrestrial radio– CARP process is broken
• Unexpected uses of the DMCA:– Lexmark v. Static Control, Skylink v.
Chamberlain– Was the DMCA meant to cover any product
that could be wrapped in a technical protection measure?
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Two Visions of Fair Use
• The Valenti School: The anti-circumvention rules stand apart, because distribution of a circumvention tool under a “fair use” safe harbor would lead to wide-spread disregard for copy protection.
• The Boucher School: The anti-circumvention rules should be subject to a fair use test, allowing consumers to selectively break protection measures as long as their underlying behavior is legal.
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The Future
• Legislative battle over meaning of “fair use” will continue.
• Sony “non infringing use” test will not be used to shut down peer-to-peer technologies.
• Expansion of the DMCA to aftermarket products must be curtailed.
• Online– piracy will only decline when legitimate services offer equivalent products